Modular quarters, RV parks springing up

Welder Landy Trapp works on his welding truck while living at an RV Park on the outskirts of Carrizo Springs, Texas, Thursday, June 9, 2011. Trapp stayed in his vehicle for the first two nights after arriving in the city three months ago. There were no hotel rooms available. He rents the RV for $325 a week and it serves as home for his family. Demand for living space shot up throughout small towns on the Eagle Ford play. Oilfield related companies are finding it hard to find accommodations for their workers. Trapp moved to the area from Kenedy, Texas and hopes to land a job that will last 6-8 months. JERRY LARA/glara@express-news.net

Photo By JERRY LARA/Jerry Lara/Express-News

Signor Group's John Petit is developing an 80-acres tract outside Carrizo Springs, Tx. to accommodate the growing need for housing, Thursday, June 9, 2011. The housing demand comes on heels of the Eagle Ford play that brings high paying jobs from the oilfield industry. Others in the small town have joined the boom and started RV Parks on their property. JERRY LARA/glara@express-news.net

Photo By JERRY LARA/Jerry Lara/Express-News

Signor Group's John Petit sits in a modular sleeping quarter on land he is developing outside Carrizo Springs, Tx, Thursday, June 9, 2011. He is developing 80 acres in order to accommodate the growing need for housing brought on by workers drawn to the Eagle Ford play area. Others in the small town have joined the boom and started RV Parks on their property. Aside from offering acreage for sale, also opened a housing camp that oilfield companies can rent for extended stays. JERRY LARA/glara@express-news.net

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Eagle Ford shale housing boom

Photo By JERRY LARA/Jerry Lara/Express-News

Marcelino Costilla stand on his porch on the outskirts of Carrizo Springs, Texas, Thursday, June 9, 2011. At the insistence of his wife, Hope, they opened an RV park with 20 slots on their six-acres parcel, background. The retired school administrator and his wife left Houston to return to their hometown of Carrizo Springs. With the money saved up from his career in education, they open the park due to the demand for living space brought on by the Eagle Ford play. Oilfield related companies are finding it hard to find accommodations for their workers. The park opened three months ago and they calculate their construction cost will be recouped by the end of the year. JERRY LARA/glara@express-news.net

Photo By JERRY LARA/Jerry Lara/Express-News

Angela Dukes arrives to clean a Signor Group's modular sleeping quarter on land outside Carrizo Springs, Texas, Thursday, June 9, 2011. Dukes moved to the area from Oklahoma and bided for the job. JERRY LARA/glara@express-news.net

Photo By JERRY LARA/Jerry Lara/Express-News

Temp worker Santa Rios cleans a Signor Group's modular sleeping quarter on land outside Carrizo Springs, Texas, Thursday, June 9, 2011. Aside from offering acreage for sale, Signor Group also opened a housing camp that oilfield companies can rent for extended stays. Rios works for Angela Dukes moved to the area from Oklahoma and bided for the cleaning job. Work demands led to Dukes hiring a temp. JERRY LARA/glara@express-news.net

Photo By JERRY LARA/Jerry Lara/Express-News

A "No Vacancy" sign is posted at Balia Inn Motel in Carrizo Springs, Texas, Thursday, June 9, 2011. The demand for living space by oilfield workers drawn to the area by the Eagle Ford play has forced the motel into renting rooms on a first come first serve basis and they don't take reservations. At the start of the day, the hotel had five rooms available but by noon, they were rented. JERRY LARA/glara@express-news.net

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CARRIZO SPRINGS — Marcelino and Hope Costilla used to watch rabbits, quail, deer and the occasional fox from their front porch rocking chairs.

Now they look out onto a 20-slot RV park, a new business venture for the couple that represents their slice of the Eagle Ford shale play.

Across cities in sparsely populated South Texas, hotels have no vacancies, small apartment complexes are full and mom-and-pop RV parks like the Costillas' are popping up (and filling up) seemingly overnight to catch the overflow of oilfield workers pouring into the area.

The overnight-millionaire money came as mineral rights were leased to oil and gas giants along the 400-mile-long Eagle Ford shale formation, which lies under 24 counties and sweeps from the border across the state to East Texas. But as Eagle Ford production begins in earnest in South Texas, providing housing — and quickly — in sparsely populated counties appears to be the next way for the enterprising to profit off of the play.

And a ripple effect has created opportunity, in turn, to cash in by providing services for the new residents for everything from cleaning to catering or washing and folding laundry.

"Looking at this play, it's like what is the next step?" asked landman John Pettit, who spent several years trading oil and gas leases in the play before launching a venture to develop an 80-acre tract called Rancho Agave near Carrizo Springs.

Pettit is a partner in Signor Group, which offers RVs and several three-bedroom modular quarters for lease to oilfield service companies and operators. The company also will tailor a development specifically to a company's needs.

So far, its various RV slots and buildings have leased easily at a price of $500 a month for RV slots and $130 a night for rooms in the temporary buildings. A geotechnical firm recently took everything Signor Group had for 4 1/2 months.

On a recent weekday, Pettit's cell phone rang relentlessly as he fielded a constant series of calls from his partners, from people looking for housing, from someone looking for a landman to help with a negotiation. Signor Group also started a joint venture to lease generators because there's so much demand for electricity hookups that the local power company sometimes falls behind.

"To have seen it before all of this stuff started, it's crazy," Pettit said. "Early on, about two years ago, it was kind of busy with the landmen working down here. Now the drilling requires more and more and more personnel. There's a huge void down here. There's no bowling alley. There's no movie theaters. There's nothing."

Boom times

Hope Costilla saw signs of the boom for months.

She and her husband couldn't get a table at a restaurant — too crowded. Homes that previously couldn't sell at any price started renting for $1,000 to $1,500 a month.

The H-E-B store where she's a checker began running out of staples such as bread and milk, and oil company executives started handing her their business cards in case she knew someone who caters, cleans or does laundry — a task in high demand because the only coin-operated laundry in town is perpetually crowded. She heard of people making more than $1,000 a day catering food for oilfield workers.

Hope looked at their six acres, where they don't own any of the mineral rights, and saw possibility.

She told her husband, "I have a good feeling about this. This is going to be good for us. They have money to spend. They are going to spend it here," she said. "I said, 'I want to go for it.' I was so excited. I still am."

Marcelino Costilla, a retired school administrator, was more cautious. He reluctantly invested in the engineering and infrastructure for the RV park, and cringes at the whirring noise of the air conditioning units on the RVs, audible reminders that his electric bill now costs a few thousand dollars a month.

"I liked having money in the bank," he said.

But three months into leasing the RV slots at $450 per month — less than some others nearby are charging — he admits it will have paid for itself before the end of the year. After that, it's all profit, and will help the couple pay for lingering medical bills from Marcelino's bout with cancer.

Pipeline welder Landy Trapp spent two nights in his truck when he first arrived in Carrizo Springs because he couldn't find a place to stay.

"There's no place to get a motel. All the motels are full," Trapp said.

Now he's paying $325 a week to rent an RV where he, his wife and daughter can stay.

The RV is a much better option for Trapp's family than the old Victorian home-turned-bunkhouse he saw in Cotulla, where workers were sleeping on mattresses on the floor and sharing restrooms for $300 per week.

"It was awful," Trapp said.

Some companies simply build housing themselves.

Frac Tech Services has 400 employees in its district office and maintenance facilities in Pleasanton, but built a 100-bed camp in Asherton, south of Carrizo Springs, as a satellite location to offer workers hot meals, laundry service and sleeping quarters.

As the industry grows in South Texas, Frac Tech spokeswoman Pamela Percival said, "Housing availability could pose more of a challenge." And it may expand its camp.

Permanent structures

At the Balia Inn in Carrizo Springs, all 52 rooms were full on a recent weekday and a "no vacancy" sign hung in the window — the new normal since late in 2010, said Anita Jimenez, who was working the front desk.

Now the hotel does not even bother taking phone reservations. Rooms are first come, first served.

"We had three or five rooms open up today, but we got rid of them right away," Jimenez said. "As soon as I came in, a company needed all of the rooms."

The best chance for a hotel room comes on the weekends, when many workers head home to see their families.

Jimenez answers a ringing telephone. "No, I don't. Sorry," she tells the caller, who had been hoping for a vacancy. She shrugs apologetically after hanging up the phone. "That's my new word: sorry."

Hotel revenues are booming like never before, according to the state comptroller's office.

In the first quarter of the year, hotel receipts were up 51 percent in Carrizo Springs, 106 percent in Pearsall, 164 percent in Beeville and 647 percent in Dilley, compared with the same months in 2009.

"I don't think I'm out of line when I say that hotels that were probably on the brink of going under or were up for sale have come out and into profitability because of the Eagle Ford," said Bob Zachariah who will break ground in July on a new hotel in Cotulla.

He estimates 800 to 1,000 hotel rooms per night in Laredo — two hours from the oilfield activity — are going to energy industry workers.

Leodoro Martinez Jr., executive director of the Middle Rio Grande Development Council, said 14 new hotels are under construction or in the planning stages in various small cities across the region, including Uvalde, Cotulla, Carrizo Springs, Crystal City, Pearsall, Dilley and Eagle Pass.

Martinez believes it's the start of a transition from temporary structures such as RV parks toward the construction of permanent buildings such as hotels, apartments or homes.

"I believe that investors are pretty well convinced this is going to be here a while," he said. "The investment on apartment and home construction is being let loose."

Stephen Williams, owner-broker of the Stephen Williams Agency in Pearsall, said the area could use more permanent housing.

"We weren't prepared for this," he said. "What a lot of people don't realize is we were saturated before the oil boom. We never had the KB Home or the D.R. Hortons. They don't come down here and build anything. We just have local builders who build one or two at a time."

That existing need is what inspired architect Lyndsay Thorn of San Antonio's Thorn + Graves to build condo units in Beeville with a client who had property there. They've started construction on the first 40 of a planned 120 units, with prices starting at $145,000 and features such as granite countertops. Thorn, whose parents owned a pub in Wales when he was growing up, also is planning to open a British pub in Beeville.

"There's a deep need for housing here, both for the general populous and the number of new businesses related to the Eagle Ford," Thorn said. "Look at some of the ridiculous rates they're paying per night (for hotel rooms) — $180 to $200 a night if you can get one. You just do that for a month and look at the math."

Shortage typical

The housing shortage across the South Texas swath of the Eagle Ford is nothing new in a state that's experienced a century's worth of oil booms and busts. Beaumont was the original oil boomtown following the strike at Spindletop, quickly mushrooming from 10,000 people to 50,000.

"It's the same thing every era," said Joe Pratt, a professor of business and history at the University of Houston, who studies the energy industry. "You see boarding houses, tent cities, people doubling up six to an apartment. You're working most of the time anyway, but you need a shower. You need a place to sleep."

But the overarching lesson from past boom-and-bust cycles, Pratt said, is that workers should to try to not spend all of their money on rent and "work all of the time and save their money."

"The ballgame is going to be how long these deposits last," Pratt said. "We don't really know."

If it all goes poof in a few years, the Costillas say they will rent RV slots to Winter Texans. Or perhaps they'll let the mesquite take over, and return to watching wildlife from their front porch.

Angela Dukes also hopes the good times will last for at least a few years. She came from Oklahoma hoping to find work as a welder's helper in Carrizo Springs, but ended up with a cleaning contract instead.

"I didn't want to clean toilets, but the money is really good. I'm getting my piece of the pie. If everything goes correctly I'll be able to retire in a few years," Dukes said. "I thank God all the time for it."

Planning

Local governments can become overwhelmed by the need to plan for more housing, road improvements or specialized workforce training.

Martinez is organizing a fall conference for all of the Eagle Ford shale communities so they can talk about common problems and solutions. But the conference can't actually be held in any of the counties in the Eagle Ford play.